Radar Logic: Sacramento Leads Nation in Price Declines

From Inman News:

Home prices fell in two thirds of the metro areas reported in a monthly home-price index released this week by real estate research firm Radar Logic. Sixteen of 24 metro areas in Radar Logic's newly launched monthly housing market report [pdf] experienced price declines during July compared to July 2006, with the most severe price drops in Sacramento, Calif., San Diego, Calif., and Washington, D.C.
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The price per square foot fell 12.7 percent in the Sacramento metro area during the 28-day period ended July 31, 2007, compared to the same period last year. The price per square foot of homes fell 10.8 percent in San Diego; 10.2 percent in Washington, D.C.; 7.3 percent in Tampa and Detroit; 5.9 percent in Las Vegas, 5 percent in Miami, 3 percent in Minneapolis, 2.4 percent in Boston, 2.2 percent in Jacksonville and 1.9 percent in Phoenix during the reporting period in July compared to the same period last year.
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Sacramento [also] had the biggest drop in price per square foot during...[the last two years], at 15.1 percent, followed by San Diego at 11.8 percent, Detroit at 10.4 percent, Washington, D.C., at 5.3 percent, and Boston at 3.8 percent.

Data and graphs here.

From Forbes:

Economists generally agree that a market requires around a 2% annual price growth to stay neutral. That means an 8% or 9% drop in price can cause chaos. That's what those living in California, Arizona, Florida, Detroit and Las Vegas can expect. These markets are projected to post the biggest price drops in the coming year. Except for Detroit, all experienced impressive price growth during the boom, which in turn spurred a great deal of construction. When the housing market fell apart, it hurt these markets in two ways. First, they were left with high amounts of unsold inventory, which depresses prices. Second, when construction stopped so did all the housing-related job growth that came with it.
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In a real bind is California, which gets hit by lending and credit problems on both the top and bottom end of the market. Riverside, Sacramento and Los Angeles all have high ARM shares and loads of subprime mortgages, but also have such expensive housing stock that the securitization freeze is hitting those buying in the middle of the market.
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Weakest U.S. Housing Markets
#5 Sacramento, Calif
Projected price change to 2008: -7.9%

Another market that could potentially feel positive effects from a loan cap raise, Sacramento was a hotbed of speculation at the tail end of the housing boom. Now there are simply too many unsold homes on the market and sellers looking to unload property are stuck in one of the nation's strongest buyers' markets.